Understanding the mechanisms of T cell anergy, a state of non-responsiveness to antigen stimulation, and being able to manipulate its induction and maintenance will have implications for treating autoimmune diseases, allergy, organ transplant rejection and cancer. The goal of the proposed study is to develop peptide inhibitors of the NFAT/AP-1/DNA complex that may be used to induce T cell anergy. The main hypothesis of this application is that anergy may be induced in T cells by blocking the downstream integration of antigen-specific signal [signal 1, T cell receptor (TCR) to NFAT] and costimulatory signal (signal 2, CD28 to AP-1) at the transcription level. Small molecule inhibitors that interfere with the NFAT/AP-1 interaction without affecting the NFAT/DNA interaction may selectively block the expression of genes involved in proliferation while allowing NFAT-dependent expression of anergy induction genes. Based on the crystal structure of the NFAT/Fos-Jun/DNA complex, a number of strategies will be designed to screen peptide inhibitors of the NFAT/Fos-Jun/DNA complex from combinatorial peptide libraries (Aim l). The selected peptides will be characterized structurally in complex with NFAT. The structure information will be used to guide the design of potent inhibitors of the NFAT/Fos-Jun/DNA complex and future design of non-peptide mimics (Aim 2). The peptide inhibitors selected in Aim 1 or designed in Aim 2 will be characterized functionally in vitro and in cultured T cells for the ability to disrupt the assembly of the NFAT/Fos-Jun complex, to inhibit NFAT/AP-1-dependent transcription, and to induce anergy in T cells. These inhibitors may be important tools for studying the basic molecular mechanisms of tolerance induction and may lead to clinical drugs for invoking antigen specific long-term immune tolerance.